BILL ANALYSIS Ó
SB 1300
Page 1
Date of Hearing: June 28, 2016
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
SB
1300 (Hernandez) - As Amended May 31, 2016
SENATE VOTE: 36-1
SUBJECT: Medi-Cal: emergency medical transport providers:
quality assurance fee.
SUMMARY: Establishes the Medi-Cal Emergency Medical
Transportation Reimbursement Act which assesses an annual
quality assurance fee (QAF) on providers of emergency medical
transportation (EMT) in accordance with a prescribed methodology
beginning on July 1, 2017. and continuing each state fiscal
quarter. Applies the QAF to three EMT billing codes.
Specifically, this bill:
1)Excludes from the definition of EMTs air ambulance providers,
or transportation provided by taxicabs, litter vans,
wheelchair vans, or other forms of public or private
conveyances, as specified.
2)Requires each EMT provider, on or before August 15, 2016, to
report to the Department of Health Care Services (DHCS) data
on the number of actual EMTs by payor type, including, without
limitation, Medi-Cal fee-for-service (FFS) EMTs and Medi-Cal
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managed care (MCMC) EMTs, and gross receipts from the
provision of EMTs provided each quarter from July 1, 2015, to
June 30, 2016, in a manner prescribed by DHCS.
3)Requires each EMT provider, commencing with the fiscal quarter
beginning on October 1, 2016, and each fiscal quarter
thereafter, on or before the 45th day of the quarter, to
report to DHCS data on the number of actual EMTs by payor
type, as specified, and gross receipts from the provision of
EMTs provided in the quarter preceding the quarter in which
the report is due, in an manner and format prescribed by DHCS.
4)Authorizes DHCS to establish an Internet Website for the
submission of the required reports specified in 2) and 3)
above.
5)Permits DHCS to require certification by each EMT under
penalty of perjury of the truth of the reports required in 2)
and 3) above. Authorizes DHCS, upon written notice to an EMT
provider, to impose a penalty of $100 per day that an EMT
provider fails to make a report, as specified. Provides that
failure to make the report within 90 days of the date upon
which the report was due is considered a licensure violation,
as specified.
6)Requires, on or before June 15, 2017, and each June 15
thereafter, the DHCS Director to calculate the annual QAF rate
applicable to the following state fiscal year based on the
most recently collected data collected from EMT providers (See
2) and 3) above), and publish the annual QAF rate on its
Internet Website.
7)Prohibits the fees calculated and collected from exceeding the
amounts allowed under federal law. Specifies calculations of
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the QAF rate as follows:
a) Calculate the QAF rate for state fiscal year (FY)
2017-18 by multiplying the projected total annual gross
receipts for all EMT providers subject to the fee by 5.5%,
the resulting product to be divided by the projected total
annual EMTs by all EMT providers subject to the fee for the
state FY; and,
b) For state FY 2018-19 and thereafter, the QAF shall be
calculated by a ratio, the numerator of which shall be the
sum of the product of the projected aggregate fee schedule
amount and the effective state medical assistance
percentage, and the amount of DHCS staffing and
administrative costs not to exceed $350,000, and the
denominator of which shall be 95% of the projected total
annual EMTs by all EMT providers subject to the fee for the
state FY.
8)Requires the DHCS Director, on or before June 15, 2017, and
each June 15 thereafter, to publish the annual QAF rate on its
Internet Website.
9)Requires the Director of DHCS to adjust the QAF rate, as
specified.
10)Requires each EMT provider subject to the fee to remit to
DHCS an amount equal to the annual QAF rate on specified
timeframes. Authorizes DHCS to assess interest not paid on
the due dates at the greater of 10% per annum or the rate at
which DHCS assesses interest on Medi-Cal program overpayments
to hospitals that are not repaid when due.
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11)Authorizes DHCS, if any fee is more than 60 days overdue to
deduct any unpaid fee and interest owed from any Medi-Cal
reimbursement payments owed to the provider until the full
amount of the fee and interest are recovered. Requires DHCS
to give the provider written notification of the deduction
which could be deducted over a period of time taking into
account the financial condition of the provider. Assesses an
additional penalty if a payment is not received after 60 days.
12)Establishes the Medi-Cal Emergency Transport Fund for
purposes of the QAF raised in this bill and provides funding
for health care coverage, in the following order of priority:
a) To pay for the DHCS's staffing and administrative costs
for implementation of this bill, not to exceed $350,000 for
each FY, exclusive of any matching funds;
b) To pay for the health care coverage in each FY in the
amount of 10% of the projected quality assurance fee
revenue for that FY, as calculated by DHCS on or before
June 15 preceding that FY, exclusive of any federal
matching funds; and,
c) To make increased payments to EMT providers.
13)Increases, effective July 1, 2017, the Medi-Cal FFS payment
schedule governing reimbursement to EMT providers for EMTs.
14)Requires DHCS to calculate the projections based on data
submitted pursuant to 2) and 3) above. Specifies the payment
schedule amounts.
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15)Requires the FFS and MCMC payment schedule increase to be
funded solely from the QAF, and federal reimbursement and any
other related federal funds.
16)Establishes provisions for delayed payment of the QAF if
there is a delay in the implementation of this bill for any
reason, including a delay in any required approval of the QAF
and the reimbursement methodology. Includes in these
provisions retroactive fees and the authority for DHCS to make
retroactive payment of supplemental rates.
17)Authorizes the DHCS Director to adopt regulation as are
necessary to implement this bill. Authorizes adoption of
regulations as emergency regulations, as specified.
18)Requires DHCS to request approval from the federal Centers
for Medicare and Medicaid Services (CMS) for the use of fees
collected for the purpose of receiving federal matching funds.
19)Authorizes the DHCS Director to alter the methodology to the
extent necessary to meet the requirements of federal law or to
obtain federal approval. Requires the DHCS Director to
execute a declaration if an alteration is necessary.
20)Authorizes the DHCS Director to add categories of exempt EMT
providers or apply a nonuniform fee per transport to EMT
providers that are subject to the fee in order to meet
requirements of federal law or regulations.
21)Implements this bill only under the following conditions:
a) The state receives federal approval of the QAF from CMS;
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and,
b) The state receives federal approval for the increased
FFS payment schedule increases.
22)Ceases implementation of this bill if one of the following
conditions is satisfied:
a) CMS no longer allows the use of the provider assessment;
b) The Medi-Cal FFS payment schedule increase no longer
remains in effect;
c) The QAF assessed and collected is no longer available;
or,
d) A final judicial determination by the California Supreme
Court or any California Court of Appeal that the revenues
collected pursuant to this article that are deposited in
the Fund are considered subject to be proceeds of taxes
within the meaning of Proposition 98.
23)Makes this bill inoperative in the event of a final judicial
determination made by any state or federal court that is not
appealed, or by a court of appellate jurisdiction that is not
further appealed, in any action by any party, or a final
determination by the administrator of the CMS, that federal
financial participation (FFP) is not available with respect to
any payment made under the methodology implemented under this
bill because the methodology is invalid, unlawful, or contrary
to any provision of federal law or regulations or of state
law.
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EXISTING LAW:
1)Establishes the Medi-Cal program, administered by the DHCS
which provides health benefits to low-income individuals who
meet specific eligibility criteria.
2)Includes EMT and nonemergency medical transport (NEMT) in the
Medi-Cal schedule of benefits.
3)Reduces specified Medi-Cal provider rates, including ground
ambulance services effective June 1, 2011, by 10% for dates of
service on and after June 1, 2011, subject to specific
requirements. Applies the 10% reduction for ambulance
providers for dates of service on or after September 5, 2013,
but was not applied retroactively back to June 2011.
FISCAL EFFECT: According to the Senate Appropriations
Committee:
1)Ongoing administrative costs, likely in the hundreds of
thousands to low millions per year for DHCS to develop
regulations, gain federal approval, make any necessary system
changes, oversee collection of the quality assurance fee, and
make supplemental payments (special fund, General Fund (GF),
and federal funds). This bill provides that $350,000 per year
shall be available to DHCS for administrative costs (the state
would be able to draw down additional federal funding to help
cover the administrative costs). To the extent that actual
administrative costs are higher, those costs would be paid
from the GF and federal funds.
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2)Ongoing GF benefit of about $3 million per year. This bill
provides that 10% of revenue collected (after setting aside
administrative funding) shall be available to the state for
support of the Medi-Cal program. In doing so, this bill
reduces the need for GF support of the Medi-Cal program by an
equal amount.
3)Additional payments of about $77 million per year for EMT in
the Medi-Cal program (special fund and federal funds). The
quality assurance fee is projected to generate about $30
million per year in revenues (after accounting for
administration and state benefits). With federal matching
funds, there would be about $77 million per year for increased
reimbursements to providers.
COMMENTS:
1) PURPOSE OF THIS BILL. According to the author, this bill
increases Medi-Cal EMT rates by levying a QAF on three EMT
reimbursement codes. The resulting revenue would then be used
to draw down additional federal Medicaid funds to increase
Medi-Cal emergency transportation rates, without imposing a
cost to the state GF. In addition, 10% of revenue raised by
the QAF would go to the state GF. The author argues
inadequate Medi-Cal reimbursement for ambulance transport is
a long-standing issue and places a strain on the state's
emergency medical services (EMS) system. Unlike other
Medi-Cal providers, ambulance providers cannot "opt out" or
otherwise limit their participation in the Medi-Cal program
the way other nonemergency health care providers can to
obtain a more favorable payor mix.
While the costs to provide essential ambulance services has
significantly increased during the past decade, including
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escalating wages and benefits, and increasing insurance
premiums, Medi-Cal reimbursement has not kept pace with these
increased costs and has in fact declined to less than the
amounts paid in 1999. The QAF proposed by this bill would
increase Medi-Cal EMT rates by drawing down federal Medicaid
dollars, which will flow back to the state to be used by
ambulance providers to maintain the high level of care that
is expected of the state's EMS and 911 programs.
2)BACKGROUND.
a) Provider Taxes. Federal Medicaid law authorizes states
to impose health care-related provider taxes on certain
types of health care services (such as inpatient hospital
services, nursing facility services, emergency ambulance
services and managed care organization) without affecting
federal matching funding. Health care-related taxes are
defined as a licensing fees, assessments, or other
mandatory payments that are related to the provision of, or
payment for, health care services or items. In many
states, including California, states collect these payments
from health care providers to help finance the nonfederal
share of their Medicaid expenditures. To be deemed
permissible under federal law, health-care related taxes
must be:
i) Broad based: imposed on all providers within a
specified class of providers;
ii) Uniform: applied at the same rate for all payers of
the tax; and,
iii) No hold harmless: the state may not provide a
direct or indirect guarantee that providers receive their
tax payment back, or be "held harmless" from the tax.
Federal rules permit some health care-related taxes that do
not meet the definition of being "broad-based" and
"uniform." To obtain permission for such a tax, states
must formally request a waiver of the broad-based and
uniform requirements from CMS, and within the waiver
request, demonstrate that the tax structure is generally
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redistributive. However, federal law does not allow for
any waiver of the no-hold-harmless requirement.
California currently has provider fees on managed care
plans, hospitals, skilled nursing facilities and
intermediate care facilities for the developmentally
disabled.
b) Medi-Cal rates for ambulance services. Medi-Cal covers
both EMT and NEMT. EMT is provided when necessary to
obtain program covered benefits when the beneficiary's
medical/physical condition is acute and severe,
necessitating immediate medical diagnosis and treatment in
order to prevent death or disability. Such transportation
does not require prior authorization and is always by
ambulance.
When billing Medi-Cal for a "911 call," ambulance providers
bill a Basic Life Support (BLS) base rate of $106.38. In
addition to the base rate, Medi-Cal provides additional
funding for additional costs and services, such as mileage,
night calls, extra attendants, waiting times, and certain
supplies and services. Medi-Cal FFS emergency base
ambulance rates were increased in 1997 and 1998 and were
last increased in 1999 by 11.7%, to $118.20. Medi-Cal base
ambulance rates were reduced in 2008 and again in 2013 (by
10%). The current Medi-Cal base rate is $106.38, a rate
that is $11.82 lower than the rate in 1999.
c) EMT. This bill imposes a QAF on revenue EMT providers
receive from three EMT reimbursement codes, as follows:
i) A0429 BLS Emergency. BLS vehicles must be staffed
by at least two people, at least one of whom must be
certified as an emergency medical technician by the State
or local authority where the services are being furnished
and be legally authorized to operate all lifesaving and
life-sustaining equipment on board the vehicle. An
emergency response is one that, at the time the ambulance
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supplier is called, responds immediately or responds as
quickly as possible to take the steps necessary to
respond to the call.
ii) A0427 Advanced Life Support (ALS1) Emergency. ALS1
vehicles must be staffed by at least two people, at least
one of whom must be certified by the State or local
authority as an EMT-Intermediate or an EMT-Paramedic.
iii) A0433 ALS 2 - ALS2 is the transportation by ground
ambulance vehicle and the provision of medically
necessary supplies and services including: 1) at least
three separate administrations of one or more medications
by intravenous push/bolus or by continuous infusion
(excluding crystalloid fluids) or 2) ground ambulance
transportation and the provision of at least one of the
ALS2 procedures: Manual defibrillation/cardioversion;
Endotracheal intubation; Central venous line; Cardiac
pacing; Chest decompression; Surgical airway; or
Intraosseous line.
d) QAF rate. This bill assesses a QAF on revenue EMT
providers receive from three EMT reimbursement codes as
specified above. A QAF rate of 5.5% is assessed for
2017-18 against the gross revenue of all EMT providers from
the three reimbursement codes. After 2017-18, estimates of
the QAF rate provided by the 911 Ambulance Provider's
Medi-Cal Alliance, the sponsor of this bill, are as
follows: for 2018-19 the QAF would be at 5.7%; for 2019-20
it would be 5.8%; and for 2020-21 and beyond, the rate
would be at 5.9%. The increase in the QAF rate is needed
to account for the reduction in the federal match (known as
the Federal Medical Assistance Percentages or FMAP) for
certain populations including adults who became eligible
for Medi-Cal under the optional expansion enacted under the
federal Affordable Care Act.
3)SUPPORT. The 911 Ambulance Provider's Medi-Cal Alliance, the
sponsor of this bill, and the Emergency Medical Services
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Administrators Association of California, state that this bill
provides financial relief to public and private ambulance
providers who have been impacted by 18 years of a growing
divide between the cost of providing emergency ambulance
services and the cost of providing care to patients.
4)RELATED LEGISLATION. AB 1257 (Gray) would have required DHCS
to establish payment rates for ground ambulance services based
on changes in the Consumer Price Index-Urban and the
California weighted average Geographic Practice Cost Index,
and would have designated the ambulance cost study conducted
by the federal Government Accountability Office as the
evidentiary base. AB 1257 was held on the Assembly
Appropriations Committee suspense file.
5)PREVIOUS LEGISLATION.
a) AB 2577 (Cooley and Pan) of 2014 would have authorized
governmental entities to make intergovernmental transfers
as the non-federal share of expenditures for ground EMT
services for purposes of drawing down federal Medicaid
matching funds. AB 2577 was vetoed by the Governor.
b) SB 1374 (Hernandez) of 2013 would have required DHCS, by
July 1, 2015, to adopt regulations establishing the
Medi-Cal reimbursement rate for ground ambulance services
using one of two specified methodologies. SB 1374 was held
on the Senate Appropriations Committee suspense file.
c) SB 359 (Hernandez) of 2011, was similar to SB 1374 in
that it would have required DHCS, by July 1, 2012, to adopt
regulations establishing the Medi-Cal reimbursement rate
for ground ambulance services using one of two specified
methodologies. SB 359 was held on the Senate
Appropriations Committee suspense file and was gutted and
amended and used for another purpose.
d) AB 678 (Pan), Chapter 397, Statutes of 2011, establishes
a supplemental payment program for governmental entity
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providers of Medi-Cal EMT services, based on certified
public expenditures using state or local governmental
entities' funds as the required federal match.
e) AB 2173 (Beall), Chapter 547, Statutes of 2010,
establishes a $4 penalty on every vehicle code violation.
The resulting revenue would be matched by federal funds and
used to make supplemental payments for emergency air
medical transportation services in the Medi-Cal program.
f) AB 1932 (Hernandez) of 2010, in its final form, would
have authorized DHCS to utilize certain service levels for
purposes of determining billing codes for emergency and
nonemergency basic life and advanced life support
transportation and specialty care transportation. If DHCS
used the service levels to determine billing codes, AB 1932
would have required DHCS to adopt the definitions and
Healthcare Common Procedure Coding System codes for those
service levels that have been established by CMS, and to
determine the above described billing codes in a
revenue-neutral manner. AB 1932 was held on the Senate
Appropriations suspense file.
g) AB 1174 (Hernández) of 2009 would have required Medi-Cal
to cover emergency BLS and advanced life support services
when a patient reasonably believes that without immediate
medical attention, a serious health condition, as
specified, could reasonably result. In addition, AB 1174
would have increased and established in statute maximum
Medi-Cal reimbursement rates for ambulance transportation
services, and would have required the rates be adjusted to
reflect changes in the California Consumer Price Index. AB
2257 (Hernandez) of 2008 was similar to AB 1174, except
that AB 2257 would have also increased Medi-Cal rates for
air ambulance providers. AB 1174 and AB 2257 were both held
on the Assembly Appropriations suspense file.
h) AB 511 (De La Torre) of 2010 would have imposed, as a
condition of participation in the Medi-Cal Program, a QAF
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on certain ambulance transportation services providers, to
be administered by DHCS. The proceeds from the QAF would
be required to be deposited into the Medi-Cal Ambulance
Transportation Services Providers Fund (Fund). Moneys in
the Fund would be available only to enhance FFP for
ambulance transportation services under the Medi-Cal
program, or to provide additional reimbursement to, and to
support quality improvement efforts of, ambulance
transportation services providers, including increased
reimbursement for and improvement of the quality of the
provision of advanced life support services, as defined.
AB 511 died in the Senate.
i) AB 1153 (Beall) of 2009 would have levied an additional
penalty of $3 upon every fine, penalty, or forfeiture
imposed and collected by the courts for all offenses
involving a vehicle violation, except certain parking
offenses, in each county. The resulting revenue would be
transferred to the state and continuously appropriated to
DHCS solely for the purposes of augmenting Medi-Cal
reimbursement paid to emergency air medical transportation
services providers. DHCS would be required to use the
moneys in the Emergency Air Medical Transportation Act Fund
and federal matching funds to increase the Medi-Cal
reimbursement or supplemental payments for emergency air
medical transportation services in an amount not to exceed
normal and customary charges charged by the emergency air
ambulance transportation services provider. AB 1153 was
held on the Senate Appropriations suspense file.
6)AMENDMENTS. This bill requires EMT providers to report to
DHCS on or before August 15, 2016, data on their transports to
be used to calculate the QAF. To give DHCS sufficient time to
determine the manner and format of reporting the data, this
timeline needs to be adjusted. Additionally, the author is
proposing to delete penalty provisions for failure to submit
the report.
14129.1.
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(a) On or before August 15, 2016 November 15, 2016 , each
EMT provider shall report to the department data on the
number of actual EMTs by payor type, including, without
limitation, Medi-Cal fee-for-service EMTs and Medi-Cal
managed care EMTs, and gross receipts from the provision of
EMTs provided in each quarter from July 1, 2015, through to
June 30, 2016 October 31, 2016 , inclusive, in a manner and
format prescribed by the department.
(b) Commencing with the fiscal quarter beginning on October
1, 2016 January 1, 2017 , and each fiscal quarter
thereafter, on or before the 45th day of the quarter, each
EMT provider shall report to the department data on the
number of actual EMTs by payor type, including, without
limitation, Medi-Cal fee-for-service EMTs and Medi-Cal
managed care EMTs, and gross receipts from the provision of
EMTs provided in the quarter preceding the quarter in which
the report is due, in a manner and format prescribed by the
department.
(c) The department may establish an Internet Web site for
the submission of reports required by this section.
(d) The department may require a certification by each EMT
under penalty of perjury of the truth of the reports
required under this section. Upon written notice to an EMT
provider, the department may impose a penalty of one
hundred dollars ($100) per day against an EMT provider for
every day that an EMT provider fails to make a report
required by this section within five days of the date upon
which the report was due. If an EMT provider has not made a
report as required by this section within 90 days of the
date upon which the report was due, the failure to make the
report shall be considered a violation of a section of the
Vehicle Code that relates to the EMT provider's licensed
activities for the purposes of Section 2542 of the Vehicle
Code.
REGISTERED SUPPORT / OPPOSITION:
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Support
911 Ambulance Provider's Medi-Cal Alliance (sponsor)
Alameda County Board of Supervisors
American Ambulance
California Fire Chiefs Association
California Professional Firefighters
Emergency Medical Services Administrators Association of
California
Fire Districts Association of California
Gold Coast Ambulance
McCormick Ambulance
Mercy Medical Transportation
Napa County Board of Supervisors
Paramedics Plus
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Opposition
None on file.
Analysis Prepared by:Rosielyn Pulmano / HEALTH / (916)
319-2097